Accounting, Payroll & Pension Issues/Semi monthly

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Question
Hello Shirley,

I would appreciate any help you can offer in regards to my question.

I used to be a salary employee and my employer recently changed our payroll to Semi monthly.

I'm confused because I was under the assumption that semi monthly meant that I would be paid for all days in that month. My employer holds one week. So each month no matter how many days I work I am only paid for 20 days. 10 days per cheque. Once every 3 or so months I will get a 3 week cheque. Does this make sense? I get paid on the 15th and 30th of every month. It seems to me that my employer is mixing two different payroll systems.

Thank you,

Sarah

Answer
Your employer is paying you Bi-weekly (26) payperiods a year and not Semi-monthly (24) payperiods a year.

The paydates can be any two days within the month. You will be paid for 10 days each payperiod and twice a year you will have 3 pay periods.

You are paid the same amount of money just paid differently than you were before.

So if you are paid 50,000 divided by 26 pay periods you are paid 1923.07 a pay period
the 1923.07 X 26 is 49999.82 which is the 50,000.00.

If you were being paid semi-monthly you would be paid the 50,000 divided by 24 pay periods or 2083.33 each pay period. 2083.33 X 24 is 49,999.92 or the 50,000.00.

Either way is legal to pay and pay periods can be on any date in the month. How he is paying is not illegal.

Shirley

I might add that because you are salaried you are paid per an annual salary divided by the number of payperiods paid and not by the days or hours worked. Only hourly are paid by the hours worked.

Accounting, Payroll & Pension Issues

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Shirley McAllister, CPP, PHR

Expertise

I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.

Experience

25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.

Organizations
SHRM, APA, I.O.M.A.

Publications
I.O.M.A. and BNA

Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

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